Volatility Arbitrage Archives - Options Trading Strategies

Volatility arbitrage - how is the profit extracted

DEFINITION of 'Volatility Arbitrage' Trading strategies that attempt to exploit differences between the forecasted future volatility of an asset and the implied volatility of options based on that asset.

Volatility arbitrage - Trade2Win

Trading Volatility: Utilizing Two Complementary Strategies

A trading strategy that seeks to capitalize on the differences between the implied volatility of an option and its actual volatility that is realized at a future date. The volatility of an option and of its underlying security, rather than price, is the key measure for trading decisions in which traders buy into low volatility and sell into high volatility.